Exploration

Silangan Project (Formerly Boyongan Project)

 

In June 2008, Philex engaged the services of an independent Qualified Person (“QP”) for National Instrument-43 101 compliant technical report and prefeasibility (the “PFS”) using Philex’s project development strategy and incorporating its own view of costs within the Philippine context. The PFS was submitted on November 14, 2008, stating the updated measured and indicated resources of Boyongan as follows:



Of the total resources estimated for Boyongan, it has been determined that about 67% are convertible into reserves, as follows:

The PFS concluded that, based upon the assumptions used in the report, the Boyongan Project is economic and technically and financially feasible and should be advanced to the next level, that of a bankable feasibility study.  It also said that the Bayugo Prospect, about one kilometer northwest of Boyongan would provide additional opportunity for additional resources, albeit not yet reportable.

In line with its obligations after acquiring Anglo’s interest in the joint venture, PMC has embarked on a program to continue the prefeasibility studies done on the Boyongan Project and to conduct resource definition and infill drilling of the Bayugo Prospect, now collectively referred to as the Silangan Project.

The Bayugo orebody was discovered in 2003 by Anglo during the definition drilling for the Boyongan orebody. Its subsequent definition drilling was, however, pursued only in 2007 and was stopped in late 2008 when Anglo decided to relinquish its rights over the Silangan Project. After the acquisition of Anglo’s interest by Philex, the exploration program for the Bayugo Prospect resumed in February 2009 with infill and resource definition drilling. A total of 66 drill holes have been completed with total meterage of 45,611 meters as of December 31, 2009.  

In November, 2009, Independent Resource Estimations (South Africa) ("IRES") prepared the NI 43-101 compliant independent mineral resource estimates for the Bayugo Project, which are set out in the table below.  Mineral resources are reported at a current economic cut-off of 0.4 % Cu for Bayugo.

Resource Category	Tonnes	Cu (%)	Au (g/t)
Indicated	85.7 million	0.88	0.73
Inferred	32.7 million	0.75	0.63

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